NEW
HAVEN,
Conn.--On
the
heels
of
Friday's
glum
Labor
Department
report,
Americans
have
a
right
to
be
confused.
Soaring
growth,
stocks
and
consumer
confidence
have
heartened
investors.
And
yet,
the
country
remains
mired
in
a
jobless
recovery.
The
reality
is
that
the
economy
has
become
more
uncertain
and
anxiety-producing
for
most
of
us
—
not
just
over
the
past
three
years,
but
over
the
past
30.
But
by
fixating
on
the
day-to-day
ups
and
downs,
analysts
have
largely
missed
the
more
telling
trend:
an
increasing
shift
of
economic
risk
from
government
and
corporations
onto
workers
and
their
families.

Signs
of
this
transformation
are
everywhere:
in
the
laid-off
programmer
whose
stock
options
are
suddenly
worthless,
in
the
former
welfare
mom
who
can
get
a
job
but
not
health
care
or
day
care,
in
the
family
forced
into
bankruptcy
by
the
sickness
of
a
child.
But
these
episodes,
while
viewed
with
sympathy,
are
usually
seen
in
isolation,
rather
than
as
parts
of
a
larger
problem.
This
blinkered
view
stands
in
the
way
of
both
diagnoses
of
the
causes
of
the
new
economic
insecurity
and
prescriptions
for
its
cure.

Consider
the
accompanying
chart.
The
line
traces
the
year-to-year
instability
of
family
income
from
1972
to
1998,
based
on
the
University
of
Michigan
Panel
Study
of
Income
Dynamics.
It
measures
the
extent
to
which
a
family's
income
from
both
government
and
the
private
sector
fluctuates
from
year
to
year,
controlling
for
the
size
of
the
family
and
the
general
rise
of
income
among
all
Americans
(so
as
not
to
confuse
upward
mobility
with
instability).

The
formula
captures
both
changes
in
the
income
of
families
and
changes
in
families
themselves,
like
divorce
and
separation,
that
alter
their
standard
of
living.
What
it
shows
is
that
family
finances
have
grown
much
more
insecure.
Although
insecurity
dropped
in
the
booms
of
the
late
1980's
and
late
1990's,
the
long-term
trend
is
sharply
upward.
In
fact,
the
instability
of
family
incomes
was
roughly
five
times
greater
at
its
peak
in
the
1990's
than
in
1972.

Optimists
point
out
that
Americans
are
much
richer
than
they
were
in
the
1970's.
But
while
they
are
as
a
whole,
incomes
have
grown
little
for
the
middle
class
and
working
poor
—
even
as
wages
have
become
more
unstable,
the
financial
effects
of
losing
a
job
have
worsened,
and
the
cost
of
things
families
need,
from
housing
to
education,
has
ballooned.
Yet
government
and
the
private
sector
aren't
just
ignoring
these
problems,
they
are
making
them
worse.
Many
programs
for
the
poor,
for
example,
have
been
substantially
cut.
And
middle-class
programs
like
Social
Security
have
steadily
eroded.

The
truly
staggering
changes,
however,
are
taking
place
in
the
private
sector.
The
number
of
Americans
without
employment-based
health
benefits
has
been
rising
for
decades.
Employers
are
also
restructuring
workplace
benefits
to
impose
more
risk
on
workers.
Once,
for
instance,
workers
lucky
enough
to
have
a
pension
enjoyed
a
guaranteed
benefit.
Now,
with
so-called
defined-contribution
plans
like
401(k)'s,
workers
have
to
put
away
their
own
wages
and
the
returns
of
the
plan
depend
entirely
on
their
own
investments.

What
might
be
done
to
help
families
cope
with
the
new
economic
insecurity?
The
essential
first
step
is
to
shore
up
existing
policies
to
ensure
broad-based
and
secure
unemployment,
pension
and
health
benefits.

Yet
simply
upgrading
present
efforts
is
not
enough.
I
believe
we
need
a
new,
flexible
universal
insurance
program
to
protect
families
against
catastrophic
expenses
and
drops
in
income,
before
families
fall
into
poverty.
Universal
insurance
would,
in
turn,
be
coupled
with
tax-subsidized
savings
accounts
that
would
help
middle
and
lower-income
families
manage
these
expenses
before
they
reached
catastrophic
levels.

Our
economy
is
in
the
throes
of
a
great
transformation
—
from
an
all-in-the-same-boat
world
of
shared
risk
toward
a
go-it-alone
world
of
personal
responsibility.
Protecting
families
from
the
greatest
"hazards
and
vicissitudes
of
life"
—
in
Franklin
Delano
Roosevelt's
still
relevant
words
—
is
necessary
and
possible,
and
it
offers
perhaps
the
best
hope
for
reviving
a
constructive
role
for
government,
on
bold
new
terms,
in
this
new
century.

Jacob
S.
Hacker,
assistant
professor
of
political
science
at
Yale
and
a
fellow
at
the
New
America
Foundation,
is
working
on
a
book
about
economic
insecurity.